WHAT LA’S NEW SEISMIC RETROFIT LAW MEANS FOR BUILDING OWNERS

Recognizing LA’s high risk for earthquakes, the LA City Council last month enacted the strictest seismic regulations in the nation. The new law requires an estimated 13,000 “soft-story” wood-framed buildings be seismically strengthened. These are typically apartment buildings with soft, weak or openfront wall lines. The ordinance also includes about 1,500 “non-ductile concrete” buildings considered vulnerable to earthquake damage and potential collapse. Seismic building retrofits are estimated to cost $60k to $250k for wood structures, but could be millions for large concrete apartment towers. Third-party lending options that link construction loan repayment to property tax payments provide some relief for owners, the most notable of which is the AllianceNRG PACE program, but several other LA lenders have also been approved. Currently, landlords can push rents up $75/month to cover repairs, but the City Council has proposed splitting costs between owners and renters, but limiting rent hikes to $38/month.